Jobless claims have exploded while small businesses have filed for bankruptcy at an alarming pace. The economic indicators are not looking up as inflation spirals out of control and the banking crisis continues to unfold.
After ugly Institue of Supply Management (ISM) employment data, dismal Job Openings and Labor Turnover Survey (JOLTS), soaring Worker Adjustment and Retraining Notification (WARN) notices, and a weaker-than-expected Automatic Data Processing (ADP) print, this morning’s Challenger, Gray & Christmas report announced a bigger than expected 89,703 job cuts in March (270,416 year-to-date), up 319.4% YoY. The West dominated the cuts (East 13,638; Midwest 21,764; West 48,123; South 6,178), with technology-sector companies, have announced 102,391 cuts so far this year, “on pace to surpass the highest annual total for the sector announced in 2001,“ the report notes.
In addition to these horrible job numbers, small businesses are filing for bankruptcy in massive numbers.
The note from UBS (Union Bank of Switzerland) Evidence Lab shows private bankruptcy filings in 2023 have exceeded the highest point recorded during the early stages of the COVID-19 scamdemic lockdowns by a considerable amount. The four-week moving average for private filings in late February was 73 percent higher than in June 2020, according to a report by ZeroHedge.
“[We] believe one of the more underappreciated signs of distress in U.S. corporate credit is already emanating from the small- and mid-size enterprises sector,” Matthew Mish, head of credit strategy at UBS, wrote in a recently published research note. “[The] smallest of firms [are] facing the most severe pressure from rising rates, persistent inflation and slowing growth.”
The ruling class continues to say there’s nothing to worry about with regard to the current economic challenges and their impact on small businesses. Even though they are planning this and fully responsible for these disasters. Last week, for example, President Joe Biden cited higher rates of new business formation over the past three years—without acknowledging the issues entrepreneurs face.
In the face of the economic destruction we are all looking at, the rulers are set to raise the corporate income tax to 28 percent sometime in the coming months. The tax hike will affect small businesses at a time when credit conditions continue to tighten. Expect jobless claims to continue to rise and small businesses to keep going out of business as the masters unleash their plan on the unwitting masses.